What are the main benefits of a Cost to Serve capability? Christophe Frère explains:
Districon enables customers to find out for themselves what the profitability is of a particular customer or product. Most companies allocate average delivery costs to their customers. This method often gives a false impression because without an effective 'activity-based' end-to-end cost allocation there is no real insight into customer behavior, loss-making patterns or cost-saving potential.
Districon helps companies to properly allocate costs to customers and products, to build and implement a Cost to Serve application and with coaching the team itself to come to the right insights and decisions (self-enablement).
What are the main benefits of a Cost to Serve capability?
- Identifying quick wins: what are our supply chain inefficiencies and can we save costs directly as of today?
- Insight into how customer behavior affects the supply chain costs: what can we save if we move the customer into another order behavior?
- Insight into profitable or loss-making customers: how important is this customer for us?
- Understanding of costs versus lead time: what is important to us as a company?
With your own Cost to Serve application you can find out how to optimally deliver particular customers and products: e.g. directly, via cross docks or through a distributor. Such decisions are fact-based, using scenario analysis on your historical supply chain data such as transport and delivery data.
Districon takes a pragmatic approach to create a Cost to Serve capability for your company.